Who brought the crazy magnet?
hahaha... you're funny... i saw this comment coming :rofl:Locrian said:Who brought the crazy magnet?
True but also remember the amount of margin allowed is based on your assets. If the value of your assets fall close to the level of the amount of money borrowed, if you do not put up extra collateral, there will be a margin call and your stock will be sold out from under your feet by the broker to cover the margin.loseyourname said:There is a very good reason that everybody sold all those shares that one day: margin buying. It was a rampant process in the late 20s. The way it works is simple: you put up, say, 10% of the cost of your shares, and some firm puts up the remaining 90%. As long as the stock goes up, you make far more money than you otherwise would have, because you can buy far more shares.
If confidence was so high then why did stocks fall to a level that resulted in so many margin calls it instigated a crash? It is certainly not impossible that the crash was instigated deliberately.loseyourname said:The problem is, when the share prices start to go down, you cannot afford to hold on wait for a recovery. If the price goes down only 10%, you've lost your entire investment. If you paid for the shares yourself, the share would need to go all the way to $0 for this to happen. Nobody worried about this in the late 20s because stock prices were consistently doing nothing but going up. They simply assumed it would continue forever. But guess what? As soon as a downward fluctuation of at least 10% takes place, the owners of shares bought recently on margin have no choice but to sell, or risk not being able to pay back the creditor who put up funds for them and going into default (which would likely mean they are never able to buy on margin again). Once these people begin selling, the fluctuation increases, until all marginal buyers are forced to sell. At that point, the downward turn is so acute that a panic occurs; everyone starts to sell, until suddenly nobody is willing to buy any new shares and the stocks are virtually worthless.
You do not need to own any shares much less thousands to instigate a crash. In fact if you are looking to make money it is essential that you do not own any shares. All you have to do is 'short' the stock in the realization that investors have already borrowed to their limit. In other words sell shares you do not own in the belief that you will be able to honour the contract by buying the shares at a future time at a lower price than your selling price. This does not require millions of people and has indeed been done by one man in relatively recent times when in 1992 Britain was forced to drop out of the ERM (the precursor to the euro) by a single currency trader George Soros who made $2 billion profit at the expense of the British gov't in just a couple of days. He achieved this by shorting the British currency and causing a panic This despite the British gov't spending billions trying to support their currency.loseyourname said:Think about the hypothesis you are putting forth, outsider. It's not like the crash was caused by a small group of people who owned thousands of shares each suddenly selling them all in a coordinated effort. The crash was caused by almost every single small investor out there selling all of their shares. A 'coordinated' effort to effect this kind of occurence would be a coordinated efforts of millions of people, most of whom have never even met each other. Exactly how is such a thing supposed to be carried out?
indeed! :rofl: :rofl: :rofl: protector of the secret?Locrian said:Lol!@#$!#$!@!!!!!@!! :rofl: :rofl:
not to mention ENRON... chapter 11 protection baby!!! thats like the bulletproof vest... bad debt? write it off to the govt... tax payers will split the bill... gotta love thatBurnsys said:Just a quote to backup outsider:
The Bankers who control the money at the top are able to approve or disapprove large loans to large and successful corporations to the extent that refusal of a loan will bring about a reduction in the price that that Corporation's stock sells for on the market. After depressing the price, the Bankers' agents buy large blocks of the stock, after which the sometimes multi-million dollar loan is approved, the stock rises, and is then sold for a profit. In this manner billions of dollars are made with which to buy more stock. This practice is so refined today that the Federal Reserve Board need only announce to the newspapers an increase or decrease in their "rediscount rate" to send stocks up and down as they wish. Using this method since 1913, the Bankers and their agents have purchased secret or open control of almost every large corporation in America. Using that control, they then force the corporations to borrow huge sums from their banks so that corporation earnings are siphoned off in the form of interest to the banks. This leaves little as actual "profits" which can be paid as dividends and explains why stock prices are often depressed, while the banks reap billions in interest from corporate loans. In effect, the bankers get almost all of the profits, while individual stockholders are left holding the bag.
well YEAH! That's WHY. IT. HAPPENED. BECAUSE NO ONE PREDICTED IT WOULD! Otherwise they never would've gotten it to that level in the first place.Jonny_trigonometry said:have you heard of the hindsight bias? looking back, it's easy to see that the market was inflated, but during those times, nobody knew where it would level off, or slow down, or what not, but surely not drastically collapse all in one day.
You're correct, but I think you're getting the hindsight bias and the ability to predict the future (clairyovance) confused. The hindsight bias is your bias of your ego being able to figure out problems that happened in the past. Everyone favors their ability to figure out problems that happened in the past.Smurf said:well YEAH! That's WHY. IT. HAPPENED. BECAUSE NO ONE PREDICTED IT WOULD! Otherwise they never would've gotten it to that level in the first place.
So basically you're saying that I think I'm better than I really am?Jonny_trigonometry said:If I gave you an anagram like "chamusat" and also said that the answer is "mustache", and I asked you how long you think it would take you to figure it out, you would probably give me an answer that would be less than the actual time that it wouldn've taken you.
... WHAT? That doesn't make any sense!If I was able to organize a massive sell off by running a secret club with loyal followers (who possess most of the money in the stock market), I'd rely on people's inability to predict the future. If you're a regular non-mason stock broker who can only react to this, and you see your stocks start to fall extremely fast, what would you do? would you assume that the past dictates the future and let them fall further, and have to explain to all your clients that you lost thier money? or would you make the same assumption and cut your losses? or would you sit there like a bump on a log, and not make any assumptions? People do try to predict the future, thats what the market is all about, and although they aren't 100% correct, they are better than 50% correct, otherwise the market wouldn't increase at all.
I'd have said I'd never have worked it out as chamusat isn't an anagram of mustache. :rofl:Jonny_trigonometry said:If I gave you an anagram like "chamusat" and also said that the answer is "mustache", and I asked you how long you think it would take you to figure it out, you would probably give me an answer that would be less than the actual time that it wouldn've taken you.
Equally questionable for the reasons I gave in my earlier postSMURF said:Hindsight has nothing to do with the stock market crash! Once it started people panicked and started selling, that increased the rate of decline. It started because someone said to themselves "Hey! This can't keep going up forever, so I think I'll cut my profits and get out while it's safe" Eventually enough people sold enough stocks in 1 day that the stock market stopped rising. When it stopped rising some people got scared and started to sell. Then it started going down, so more people got really scared and they sold.... See how that works? You don't need to have a degree in economics to figure it out, it's basic economics and history today. It wasn't caused by any conspiracy. It was inevitable.
Nor would I, because I've never spelled it Mustache.Art said:I'd have said I'd never have worked it out as chamusat isn't an anagram of mustache. :rofl:
Yet there is no evidence for it. There are detailed analysis' of the stock market crash in any University or Public Library, and untill you present a thesis on which to base your theory that it was planned it's still just wishfull thinking.Equally questionable for the reasons I gave in my earlier post
Unless you are also logged on here as Johnny_Trigonometry then I never said you did.Smurf said:Nor would I, because I've never spelled it Mustache.
I don't have a theory it was planned. I am simply saying it could have been done deliberately. By definition somebody or some organisation has to have started the selling to create the domino effect otherwise the crash would never have happened. It is their motives which are open to questioning but I don't see how it is possible to ever know what these motives were.SMURF said:Yet there is no evidence for it. There are detailed analysis of the stock market crash in any University or Public Library, and untill you present a thesis on which to base your theory that it was planned it's still just wishfull thinking.
Okay. I agree with you.Art said:I don't have a theory it was planned. I am simply saying it could have been done deliberately.
Seriously. Jeez, even I am at a loss to respond to that post.Locrian said:Who brought the crazy magnet?
Sorry that was too long to repost or even go through point by point.Jonny_trigonometry said:ok, I'm spilling the beans.
eh, I'm gonna go to bed now.
The lack of a response and the tendency to attempt to band together with an identity, who has said nothing but made an irrational judgment, displays the mental barriers of even intelligent individuals. Your inability to see the possibility is what you and others should question. You may have never lived in a major city or participated in the business world enough to see the landscape to grasp the concepts that I have described, but I"m sure you remember that Martha Stewart had to go to jail for INSIDER TRADING.russ_watters said:Seriously. Jeez, even I am at a loss to respond to that post.
Outsider, insider trading is designed to get a person out a single company before its stock goes down so they can buy it up again cheap and make money when it rises once more. How would you apply this to the crash of 1929? It took what? Fifteen years for the market to recover and start making money again? If people couldn't pull out an reinvest in the market, where exactly do you think they invested their money? Nothing was profitable in the 30s and nothing in the 40s until the US went to war. But how could these people have known there would be a war? Do you now want to tell me that the same people who caused the crash caused WWII?outsider said:The lack of a response and the tendency to attempt to band together with an identity, who has said nothing but made an irrational judgment, displays the mental barriers of even intelligent individuals. Your inability to see the possibility is what you and others should question. You may have never lived in a major city or participated in the business world enough to see the landscape to grasp the concepts that I have described, but I"m sure you remember that Martha Stewart had to go to jail for INSIDER TRADING.
Of course people know this. but they may not know this:Smurf said:Take out a one dollar bill, and look at it.
But think about this:
13 original colonies,
13 signers of the Declaration of Independence,
13 stripes on our flag,
13 steps on the Pyramid,
13 letters in the Latin above,
13 letters in "E Pluribus Unum,"
13 stars above the Eagle,
13 bars on that shield,
13 leaves on the olive branch,
13 fruits, and if you look closely, 13 arrows.
And, for minorities: the 13th Amendment.
I ask people, "Why don't you know this?" Your children don't know this, and their history teachers don't know this. Too many veterans have given up too much to ever let the meaning fade. Many veterans remember coming home to an America that didn't care. Too many veterans never came home at all. Share this page with some of your e-mail friends, so they can learn what is on the back of the UNITED STATES ONE DOLLAR BILL, and what it stands for... Otherwise, they will probably never know.
Easier to read now?